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Sales tax split negotiations cause political rifts

Cities and counties must sign new sales tax sharing agreements every 10 years

BRUNSWICK | As cities and counties across Georgia scrap over the division of a 1-cent sales tax, Brenda Stalvey is in an enviable position.

Stalvey, the Echols County clerk/administrator, recently had to send paperwork to the state Department of Revenue explaining how the county planned to divvy up the proceeds of the Local Option Sales Tax, or LOST.

“I have to fill out a form with all the entities in the county — of which there are none. I still have to say, Echols County 100 percent and put a zero beside all the others,’’ she said.

The only thing that approaches a city in Echols County is the county seat, unincorporated Statenville, which has the courthouse, scattered residences, a school, a few stores and a caution light to slow people down.

The tax brought in $195,378 last year.

“We don’t have enough to share anyway,’’ she said.

The tax brings in millions in most other counties and that has some governments in Southeast Georgia at loggerheads.

The state law that created the tax in the 1980s to take some burden off property taxes says participating governments must renegotiate the tax after every U.S. Census. At the time, home and business owners were paying for more than 60 percent of the cost of local government.

The new contracts must take into account new population figures and some other factors, the law says.

With the help of University of Georgia mediators, Brunswick and Glynn County agreed on a split that is still subject to votes by the separate commissions.

Brunswick now gets 35 percent of the tax. The city and its consulting experts said Brunswick, in spite of having a smaller share of the county’s population, deserves 37 percent while the county’s consulting experts said it deserves only 19 percent.

At least they have an agreement to consider, which should keep them out of court. That’s the mandated next step if the first two fail. The law requires face-to-face negotiations followed by mediation or arbitration.

The third and last chance is to put the matter before a Superior Court judge from outside the circuit. Both sides would present their best proposal and the judge would choose all of one or all of the other without adopted pieces of each.

The sides don’t have to accept the judge’s decision, but if there’s no agreement by Dec. 31, the tax disappears.

Charlton County and Folkston negotiated for 60 days, County Manager Al Crace said.

“That didn’t work out at all,’’ he said.

They now find themselves about “a pickup truck a year apart,’’ Crace said.

The city and county is about $232,035 over the 10-year life of the tax. Crace figures that’s about $23,000 a year, which would get you a pretty good truck with some options.

The city of Homeland, which has only 910 residents, gets the same per capita share of the tax as Folkston, which has 4,148 residents and negotiates for both cities, Crace said.

The cities now get 34 percent. Although Folkston’s population is swelled by the 1,600 inmates at D. Ray James prison, the county is headed toward a larger split.

The lawyers, accountants and administrators came up with graduated formulas that would remove some of the early shock of the revenue loss to the cities, but so far the elected officials have refused to go along with it.

“We’ve gone to a cool down period now,’’ and sent word to the University of Georgia’s governmental consulting agencies that they need someone to help bridge the gap, Crace said.

Ware County and Waycross are also stymied.

As a Waycross resident, County Commissioner Carlos Nelson has a foot on either side of the divide and says both sides are wrong.

Under the current agreement, the county gets 52 percent and the city 48 percent.

Ware County officials want 68 percent while Waycross wants an increase to collect more than half the tax, Nelson said.

“The city asking for a majority of the tax is like us asking for 68 percent,’’ he said.

Nelson recalled the meeting at which the county made its pitch.

“By the time the city got through laughing, the meeting was pretty much over,’’ he said.

Based solely on population — the city has 15,000 residents while 21,000 live in unincorporated areas — the county would get 58 percent and the city 42 percent.

The city is basing its stand for an increase on the fact that the stores, restaurants and other businesses that generate the tax are mostly located inside the city limits.

“The city is saying they provide a lot of infrastructure, the maintenance of the roads, police and fire protection for the businesses that bring the tax in,’’ Nelson said.

The county says that the tax ought to benefit all the residents of the county and that to give Waycross a larger share would actually cut into the deserved tax relief for residents who live outside the city.

Nelson said both sides have to give, but that Waycross has far more to lose.

“A 68-32 split would pretty much devastate the city. We can’t move forward trying to bankrupt the city,’’ he said.